Blog
This section provides an overview of the blog, showcasing a variety of articles, insights, and resources to inform and inspire readers.
-
How an Outsourced Finance Department Can Help Your Business
Read more: How an Outsourced Finance Department Can Help Your BusinessBlog This section provides an overview of the blog, showcasing a variety of articles, insights,…
Running a business means dealing with countless demands every day. From finding new customers and managing employees to delivering your products or services, there is always something that needs your attention.
One area that can quickly become difficult to manage is your business finances.
As your business grows, so does the amount of financial administration. Invoices need to be raised, bills need to be paid, bank accounts reconciled, expenses recorded and VAT returns completed. At the same time, you need to understand whether your business is making money, manage cash flow and plan for the future.
For many small and medium-sized businesses, employing a full-time finance department may not be practical or cost-effective.
This is where an outsourced finance department can help.
What is an outsourced finance department?
An outsourced finance department is where a business uses an external team of finance and accounting professionals to manage some or all of its financial requirements.
Rather than employing a full-time bookkeeper, accountant and Financial Controller, you can outsource these functions to an experienced finance provider.
The services can be tailored to suit your business. You may simply need help with your day-to-day bookkeeping and accounts, or you may need a more complete finance function covering management accounts, cash flow forecasting, budgeting and financial reporting.
The important thing is that you can choose the level of support your business actually needs.
Why outsource your business accounts?
There are many reasons why businesses choose to outsource their finance function.
For a growing business, outsourcing can provide access to experienced financial professionals without the cost and commitment associated with employing a full in-house team.
It can also give business owners more time to concentrate on running their business, while providing better visibility of their financial performance.
Here are some of the main benefits of using an outsourced finance department.
1. Save time on financial administration
Bookkeeping and financial administration are essential, but they can take up a significant amount of a business owner’s time.
You may find yourself spending evenings checking invoices, reconciling transactions or trying to keep spreadsheets up to date.
Outsourcing these responsibilities allows you to spend more time on the parts of your business that generate growth.
Your accounts are still being managed, but you no longer have to do everything yourself.
2. Access professional financial expertise
Hiring an experienced finance professional can be expensive, particularly for a small or growing business.
However, you may still need access to that expertise.
An outsourced finance department gives you access to experienced bookkeeping and accounting professionals without necessarily having to employ them full-time.
As well as managing your accounts, an outsourced finance team can help you understand your numbers and provide financial information that supports better business decisions.
3. Improve your cash flow management
Cash flow is one of the most important financial considerations for any business.
Even a profitable business can experience financial pressure if customers are slow to pay or large expenses become due at the wrong time.
An outsourced finance team can help you monitor your cash position and understand what is happening with your money.
This can include monitoring outstanding invoices, tracking upcoming payments and preparing cash flow forecasts.
Having a clearer picture of your future cash flow allows you to identify potential problems earlier and plan accordingly.
4. Get better financial information
Knowing how much money is currently in your bank account only tells you part of the story.
To properly understand your business, you need to know how much revenue you are generating, what your costs are, whether you are making a profit and how your performance is changing over time.
Regular management accounts and financial reports can provide this information.
Instead of waiting until your year-end accounts are prepared, you can have regular information about how your business is performing.
This allows you to make decisions based on current financial information rather than guesswork.
5. Reduce the cost of your finance function
Building an internal finance team can be expensive.
Alongside salaries, there are employer costs, recruitment, training, software, equipment, holidays and other overheads to consider.
For many SMEs, having several full-time finance employees may simply not make sense.
With an outsourced finance department, you can access the services you need without necessarily carrying the cost of a full internal team.
You can also adjust the level of support as your business changes.
6. Support business growth
As your business grows, your financial requirements will change.
A business starting out may only require basic bookkeeping and annual accounts. A growing business may need monthly management accounts, payroll, budgeting, cash flow forecasting and more detailed financial analysis.
An outsourced finance provider can adapt its services as your business develops.
This means you can build a finance function around your business rather than trying to make your business fit around an existing finance structure.
7. Make better business decisions
Good financial information should do more than record what has already happened.
It should help you make better decisions about what happens next.
For example, you may be considering employing another member of staff, purchasing equipment, opening a new location or investing in marketing.
Understanding your current financial position and future cash flow can help you assess whether these decisions are affordable and financially sustainable.
An outsourced finance team can provide the information and insight you need to make these decisions with greater confidence.
Outsourced bookkeeping and accounting in one place
One of the advantages of working with an outsourced finance provider is that you can bring different financial services together.
Rather than dealing with several different providers, you may be able to have your bookkeeping, accounting and wider financial management handled by one team.
Depending on your requirements, this could include:
- Day-to-day bookkeeping
- Bank reconciliations
- Accounts payable and receivable
- VAT returns
- Payroll
- Management accounts
- Financial reporting
- Cash flow forecasting
- Budgeting and forecasting
- Business financial advice
The exact services you need will depend on the size and stage of your business.
Do you need an outsourced finance department?
Outsourcing your finance function can be particularly useful if you are a small or medium-sized business that has outgrown basic bookkeeping but is not yet ready to employ a full-time finance team.
It may also be worth considering if:
- You are spending too much time managing your accounts
- Your bookkeeping is falling behind
- You do not have a clear picture of your business finances
- Cash flow is becoming difficult to manage
- You need regular management accounts
- You are planning to grow your business
- You need access to more experienced financial expertise
- You want to reduce the cost of your finance function
The right outsourced finance provider can effectively become an extension of your business.
A flexible alternative to an in-house finance team
Outsourcing does not have to mean handing over everything and losing control of your finances.
A good outsourced finance service should work alongside you and provide the information, support and expertise you need.
At Tailormade Solutions, we provide outsourced bookkeeping, accounting and financial services designed around the individual needs of small and medium-sized businesses.
Our aim is to provide the expertise and support you would expect from an experienced finance department, but in a flexible and scalable way.
Whether you need help with your day-to-day bookkeeping or require more comprehensive financial support, we can tailor our services around your business.
Take control of your business finances
Your finances should help you run your business, not become a burden that takes you away from it.
An outsourced finance department can save you time, provide access to professional expertise, improve your financial visibility and give you greater confidence when making important business decisions.
As your business grows, having the right financial support in place can become increasingly important.
If you think your business could benefit from outsourced bookkeeping, accounting or finance services, Tailormade Solutions can provide a flexible solution tailored to your needs.
Get in touch with Tailormade Solutions today to discuss how an outsourced finance department could support your business.
Leave a Reply